Airbus profit rises 50% on orders backlog

RobertWall

Airbus Group NV said Wednesday its first-half net profit rose 50% as the world's second-largest maker of commercial jetliners benefited from a large backlog of orders.

Net profit for the first six months of the year was EUR1.14 billion ($1.53 billion) compared with EUR758 million in the year-earlier period, the Toulouse, France-based company said. Sales in the first half rose 6% to EUR27.2 billion and Airbus had a EUR677.4 billion backlog of orders at the end of the period.

Second-quarter net profit was EUR696 million, up 31% from EUR531 million, as sales advanced 7% in the quarter to EUR14.5 billion.

Airbus Group CEO Tom Enders said the company focused on keeping development and production programs on track in the first half, while implementing the restructuring of its defense and space operations begun last year. "This is shown in the solid improvement in revenues and profitability," Mr. Enders said.

As part of its restructuring plan, Airbus said it is studying disposal options for its nonvoting share in Dassault Aviation SA, the maker of business aircraft and the Rafale combat jet. Airbus has a 46% stake in the company. The French government has the right of first refusal on the disposal of some or all of the stake.

Airbus said it secured $75.3 billion in deals at the Farnborough air show this month, where it introduced an upgrade of its A330 widebody jet. The so-called A330neo is due for delivery from late 2017 and promises 14% greater efficiency over the existing model largely by adding new engines from Rolls-Royce Holdings PLC.

The A330 has been an important contributor to Airbus profits, but the existing version was starting to run short of orders as more fuel-efficient planes such as the Boeing Co. 787 Dreamliner entered the market. Airbus has won 127 commitments for the A330neo jet and it projects demand to top 1,000 aircraft.

Airbus maintained its full-year guidance of moderate returns on sales growth this year while reaching 7% to 8% returns in 2015, not counting development costs of the A330neo. Those will crimp return on sales next year, the company said when it launched the project.

Airbus's newest long-range jetliner, the A350, is in its final test phase before regulators sign-off on the design, clearing the way for the first jet to be delivered to lead-operator Qatar Airways Ltd. before year end. "The A350 program remains challenging," Airbus said in the statement, though certification for safety authorities remains on track for this quarter.

Airbus on Tuesday said it had canceled a deal to sell six A380 superjumbos to Japan's Skymark Airlines. Two of the planes have already been assembled leaving the manufacturer to seek other buyers at a time it has struggled to win new orders for its flagship plane.

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